By Ken Afor
Oil prices rose more than 1 percent on Thursday, snapping three-day lows, as risk appetite returned to financial markets after the U.S.
The Federal Reserve left interest rates unchanged.
Brent crude futures rose 89 cents, or 1.1 percent, to trade at $85.52 a barrel, while U.S. West Texas Intermediate crude futures rose 91 cents, or 1. 1%, reaching $81.35 per barrel.
Both indicators hit multi-week lows in the previous session. The rise in oil prices was accompanied by a rise in financial assets after the Federal Reserve kept interest rates unchanged at 5.25% to 5.50% at its last meeting on Wednesday.
Policymakers have been trying to determine whether fiscal conditions are tight enough to curb inflation or whether a stronger-than-expected economy calls for more restrictions.
“It is likely that the Fed will once again pause in December, keeping the door open for further hikes if necessary. This could potentially stabilize the risk-off movements experienced over the past few months,” Jon Maier, chief investment officer at Global X ETFs, said in a note.
Investors are also watching for development in the Middle East which has kept investors on edge about whether it could disrupt oil supplies around the region.
Iran’s Supreme Leader Ayatollah Ali Khamenei called on Muslim states to cease oil and food exports to Israel, demanding an end to its bombardment of the Gaza Strip, state media reported.
Iran, a member of the Organization of the Petroleum Exporting Countries (OPEC), produced around 2.5 million barrels per day of crude in 2022, according to U.S. energy data.
Market participants awaited a Bank of England meeting, expected Thursday. In Europe, October inflation in the Euro zone was at its lowest in two years, a Eurostat flash reading showed, stoking the view that the European Central Bank is unlikely to hike interest rates soon.
J.P.Morgan analysts estimated global oil demand averaged 102.1 million barrels-per-day (bpd) in October, about 100,000 bpd below their previous projection for the month.
Data from U.S. Energy Information Administration (EIA) showed that the country’s crude stocks increased as refiners undergoing seasonal maintenance restarted units more slowly than expected.
But despite lower refining runs, U.S. gasoline stocks (USOILG=ECI) rose by 0.1 million barrels in the week to 223.5 million barrels, the EIA said.
